Labour's central argument that we need to borrow will add an extra £2,960 in
debt to every working family, says Justice Secretary Chris Grayling.

Over the summer we’ve seen more encouraging news that our economy is healing: the growth figures are heading in the right direction, exports are rising, foreign investment is increasing and unemployment is falling.

All the reliable indicators confirm that things are beginning to recover. Labour’s central argument for the past three years - that we needed to borrow more to get things moving - has been discredited.

But for families up and down the country, life is still very tough: bills need to be paid, the car needs to go for its MOT, the children want the odd treat. For many, the cost of living remains a real struggle. So although things are looking up, this Government is anything but complacent. There will be no celebration - no declaration of job done - until we see a recovery that benefits hardworking people everywhere.

David Cameron and George Osborne are taking some tough decisions to secure a recovery which benefits everyone. They are sticking to the course we set out three years ago.

Fundamentally, the way to raise living standards is to make sure our economy keeps on growing. And in the world of today, Britain will only succeed if it is fit to compete in the tough global race. That’s why we are undertaking big long term reforms to make sure wealth and opportunity flow into this country. It’s why we’re cutting our deficit and firing up our private sector, so there are good, sustainable jobs around the country.

It’s why we’re capping benefits so people can get off welfare and into work. And it’s why we’re sorting out our schools after years of decline, so that our children have everything they need to take on the world’s best. Above all, we are backing everyone in this country who works hard and wants to get on in life – that’s how living standards really rise.

These changes are already beginning to bear fruit – 1.3 million new jobs in the private sector, over a million apprenticeships started and 300,000 plus new small businesses. And in time, Britain will feel the full benefits of the changes we are carrying out.

But while we are undertaking these long term reforms – there are also more immediate things we are doing to help families with the cost of living. I’m proud that it’s this Government which has cut income tax for 25 million people, cut fuel duty by 13p compared to Labour’s plans, frozen council tax across the country for three years in a row, kept beer duty untouched in this year’s Budget - and is forcing energy companies to put their customers on the lowest tariff.

Of course we would like to do more – much more - but because of the truly dreadful inheritance from Labour we have to act responsibly. Nonetheless, we are making life just that little bit easier for people – showing that where we can help, we always will.

We will also hold Labour to account. Last week Ed Miliband flew back into Britain, eager to blame this Government for the squeeze that people are facing. This is a shamefaced attempt to rewrite history. Labour’s record on living standards is appalling – they did nothing to stand up for hardworking people while in office.

Even in the boom years of 2003 to 2008, hourly pay rose only at a quarter of the rate of economic growth. Labour’s debt crisis then made a bad situation even worse. The struggle with the cost of living that people face today began when Ed Miliband was a senior minister in the last government.

It’s not just Conservatives who say this. Liam Byrne - the shadow minister who famously told us there was no money left - has admitted that Labour knew about these problems for years but did nothing.

However, the real argument lies not in what Labour did yesterday but what they would do tomorrow. And make no mistake - Labour’s prescription of more borrowing and more debt would see hardworking families worse off.

This week the Conservative Party will be making the case clearer than ever that they’re still the same old Labour. If you have a mortgage, you will be worse off under Labour: more borrowing would lead to a rise in market interest rates, sending mortgage payments up.

It only takes a one per cent rise in interest rates to add an average £1,000 to your mortgage bill each year. If you are in work, you will be worse off under Labour: they oppose capping the benefits out-of-work households can claim, leaving you to pay more of your tax on welfare.

If you pay an energy bill, you will be worse off under Labour: Ed Miliband’s commitment to a decarbonisation target by 2030 could add £125 to your tariff.

All told, Labour’s borrowing would add an extra £2,960 in debt to every working family in Britain. The more you dig, the more their rhetoric on the cost of living rings hollow.

Three years on since we came into Government, a lot has been achieved. We’ve stopped the rot and put Britain on the right course to recovery. But we know how far there is still to go. There is no quick fix to secure a recovery which benefits everyone – just hard graft and determination. And that’s exactly what this Government is doing - it is more important than ever to stick to our plan.